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Analysis of Household Demand for Food in South Africa: Model Selection, Expenditure Endogeneity, and the Influence of Socio- Demographic Effects
Abstract
This study analyzes food expenditure patterns in South Africa, taking into account differences in demand behavior across rural and urban households, as well as across income groups. The analysis is carried out using the QUAIDS model, accounting for demographic effects, structural change, and seasonality effects. Expenditure endogeneity is also tested and controlled for. The study makes use of household food consumption data, collected as part of the KwaZulu-Natal Income Dynamics Study. Demand behavior differs significantly between rural and urban households, as well as across income groups, implying that an accurate analysis of expenditure patterns in South Africa requires a disaggregated analysis that takes into account these differences in demand behavior.
... Contributions include those of Alderman and Del Ninno (1999) as well as Dune and Edkins (2008), who applied the AIDS model in estimating the demand for different food groups. Also estimating the demand for food, Agbola (2003) applied the LA/AIDS model, while Bopape and Myers (2007) applied the QUAIDS model (only for demand in KwaZulu-Natal). Selvanathan and Selvanathan (2004) estimated a complete consumer demand system by way of a comparison between the CBS demand system and the AIDS model. 2 However, the surveys on household expenditure used for previous estimations of demand in South Africa did not record price data. ...
... Selvanathan and Selvanathan (2004) estimated a complete consumer demand system by way of a comparison between the CBS demand system and the AIDS model. 2 However, the surveys on household expenditure used for previous estimations of demand in South Africa did not record price data. Although it was mentioned by Bopape and Myers (2007) that the KwaZulu-Natal Income Dynamics Survey included price data, closer inspection of this data set revealed no recorded prices. The Living Standards and Development Survey used by Alderman and Del Ninno (1999) required households to record either total expenditure or quantity purchased. ...
... Further, the QUAIDS model has not been previously applied to all goods and services or all food groups in South Africa. This is a contribution in its own right, since, as is shown in this paper and by Bopape and Myers (2007), South African household expenditure is non-linear and only the QUAIDS model (of the previously mentioned models) provides for non-linearity. As noted by Blundell and Robin (1999:209): ...
Empirical analysis of South African indirect tax policy reform and the welfare consequences of such reform has been limited by a lack of reliable consumer demand system estimations. One reason for potentially unreliable demand estimations is not using actual price data in estimation. In this paper, the results of a nutritional goods demand system estimation and a complete demand system estimation are reported. Both systems were estimated with the use of the quadratic almost ideal demand system (QUAIDS) model incorporating demographic variables and using actual price and expenditure data. Subsequent to estimations, expenditure, own and cross-price elasticities of demand were calculated for both demand systems. The coefficients estimated provided largely statistical significant results and all elasticities calculated seem plausible in sign and magnitude.
... The impact of this disaggregation on the elasticities of the CPC two-digit products are clearly observed in Table 7, with the income elasticity of demand for grains and starch items, tobacco products, leather products and footwear, as well as metals and machinery items exhibiting some discreet discontinuities. In general, however, decreases in the expenditure elasticity for food items are observed for meat, vegetable, and oil products, as well as dairy and egg products, in a manner consistent with the findings of Bopape and Myers (2007), who used a quadratic almost ideal demand system (QUAIDS) model on the KwaZulu-Natal Income Dynamic Survey. Furthermore, the elasticities at the lower end of the income distribution are closer to those estimated for the entire income distribution for low-income countries such as Tanzania and Malawi (Chongela et al. 2013;Ecker and Qaim 2008). ...
... Consistent with the international literature the price elasticities of food items is within the -1 and 0 interval. We find a price elasticity for food of around -.492, lower than the findings of Case (2000) and Bopape and Myers (2007), but broadly in line with those found by Dunne and Edkins (2008). Within food items, households are more sensitive to increases in the prices of meat, vegetables, and oils, dairy and egg products, and beverages than the prices of grains and starches. ...
... These elasticities for the poor are also high internationally with the price elasticity of meats, wheat, and dairy being -0.908, -0.480, and -0.850 for India (Kumar 2011); -0.448, -0.207, and -0.529 in the US (Park et al. 1996) and -0.53, -0.71, and -0.29 for Indonesia (Jensen and Manrique 1998) respectively for persons at the lower end of the income distribution. The estimates are generally higher than those estimated by Bopape and Myers (2007), however. ...
... Contributions include those of Alderman and Del Ninno (1999) as well as Dune and Edkins (2008), who applied the AIDS model in estimating the demand for different food groups. Also estimating the demand for food, applied the LA/AIDS model, while Bopape and Myers (2007) applied the QUAIDS model (only for demand in KwaZulu-Natal). Selvanathan and Selvanathan (2004) estimated a complete consumer demand system by way of a comparison between the CBS demand system and the AIDS model. 2 However, the surveys on household expenditure used for previous estimations of demand in South Africa did not record price data. ...
... Selvanathan and Selvanathan (2004) estimated a complete consumer demand system by way of a comparison between the CBS demand system and the AIDS model. 2 However, the surveys on household expenditure used for previous estimations of demand in South Africa did not record price data. Although it was mentioned by Bopape and Myers (2007) that the KwaZulu-Natal Income Dynamics Survey included price data, closer inspection of this data set revealed no recorded prices. The Living Standards and Development Survey used by Alderman and Del Ninno (1999) required households to record either total expenditure or quantity purchased. ...
... Further, the QUAIDS model has not been previously applied to all goods and services or all food groups in South Africa. This is a contribution in its own right, since, as is shown in this paper and by Bopape and Myers (2007), South African household expenditure is non-linear and only the QUAIDS model (of the previously mentioned models) provides for non-linearity. As noted by Blundell and Robin (1999:209): ...
Empirical analysis of South African indirect tax policy reform and the welfare consequences of such reform has been limited by a lack of reliable consumer demand system estimations. One reason for potentially unreliable demand estimations is not using actual price data in estimation. In this paper, the results of a nutritional goods demand system estimation and a complete demand system estimation are reported. Both systems were estimated with the use of the quadratic almost ideal demand system (QUAIDS) model incorporating demographic variables and using actual price and expenditure data. Subsequent to estimations, expenditure, own and cross-price elasticities of demand were calculated for both demand systems. The coefficients estimated provided largely statistical significant results and all elasticities calculated seem plausible in sign and magnitude.
... The results also confirm our quadratic specification of the model in all the cases except for the oils. Bopape and Myers (2007) also failed to reject a linear relationship between per capita total expenditures and share of oils in total expenditures. The urban dummy is also significant in all the cases but with a negative sign in case of Cereals, Pulses, Milks and Sugars. ...
... All other cross prices are highly significant at 99% in the budget share equation for the oils and their signs indicate a decline in demand for oils due to the increase in their prices. Bopape and Myers (2007) did the demand analysis for South Africa while Mittal (2006) did so for India. Bopape and Myers (2007) found negative relation between oils demand and the prices of meat and dairy products, while Mittal (2006) found negative relation between demand for oils and prices of pulses and sugars. ...
... Bopape and Myers (2007) did the demand analysis for South Africa while Mittal (2006) did so for India. Bopape and Myers (2007) found negative relation between oils demand and the prices of meat and dairy products, while Mittal (2006) found negative relation between demand for oils and prices of pulses and sugars. ...
Abstract | Pakistan is the fastest urbanizing country among all of the South Asian Countries and its rural
population may equalize that of the urban till 2030. There are other changes as well like population growth
and the wealth effects that have been observed in Pakistan. These changes can affect the consumption pattern
of the people, and hence result in the food demand shifts. The current study estimates for the presence
of structural shifts in the demand for food in Pakistan for the selected food groups from the Household
Integrated Economic Survey for the years 1985-86, 1993-94, 2001-02 and 2007-08. Quadratic Almost Ideal
Demand System (QUAIDS) is employed to estimate the budget shares and test for these shifts. The results
confirm for the significance of the quadratic variables in the model except for the Oils’ group. The presence
of these shifts have been proved in Pakistan and hence there are other factors as well like urbanization that
causing these shifts in food demand, apart from the changes in expenditures and the relative prices. Hence,
agricultural import and export, and farm related policies should be made harmonious with the changing population statistics and pacing urbanization in Pakistan to make this transition period smooth.
... Significant differences among regions within different countries could be explained by FV availability and prices (Ruel et al., 2005). Bopape and Myers (2007) in their study in South Africa found demand behavior to differ significantly between rural and urban households. When the total household expenditure rises, the urban and high income households tend to be more responsive in their expenditure decisions for fruits and vegetables than rural and low income households (Bopape and Myers, 2007). ...
... Bopape and Myers (2007) in their study in South Africa found demand behavior to differ significantly between rural and urban households. When the total household expenditure rises, the urban and high income households tend to be more responsive in their expenditure decisions for fruits and vegetables than rural and low income households (Bopape and Myers, 2007). However, the regional effects, difference between food consumption in northern and southern India were mixed and difficult to interpret, nevertheless the study revealed that regional differences in consumption patterns are present (Abdulai et al., 1999). ...
... Obayelu et al. (2009) found inelastic own price elasticities for FV. In their study in South Africa, Bopape and Myers (2007) estimated the uncompensated price elasticities for fruits and vegetables and found them to be price inelastic across all household groups. The own-price elasticities and total expenditure elasticities for traditional and processed vegetables were found to be high for most household types in study of Gustavsen and Rickertsen (2002). ...
The results found in this study have implications for local Nigerian food producers, retailers, other participants of the food sector, and government food policy makers. In this thesis the demand analysis for onion, peppers, fresh okra and tomato in Nigeria was conducted using General Household Survey data collected by the World Bank and the Nigeria National Bureau of Statistics. The two stage estimation procedure and Linear Approximation Almost Ideal Demand System addressing censoring were used to analyze the demand system. The analyses are based on the assumption that every household is maximizing its utility subject to a budget constraint. Standard errors on both stages of the estimation as well as for the calculated elasticities were adjusted using a bootstrap procedure. Most of the demographic characteristics determining consumption were significant. Marshallian cross price elasticities suggest that the products are a mix of gross substitutes and complements, whereas positive values of Hicksian cross-price elasticities indicate that all vegetables are net substitutes. According to expenditure elasticities, not all of the vegetables appear to be normal goods. Negative expenditure elasticity for fresh okra indicates that the vegetable is an inferior good. A combination of policies that increase purchasing power of population, and fosters food supply would benefit a developing country, like Nigeria, the most. Increased supply would trigger an increase in quantity demanded, improving the livelihood of agricultural producers, poor households and potentially creating more jobs in agricultural and related industries.
... This preference is related to the different tastes in household social-demographic conditions (Nicholson et al., 2008). According to several studies, the social demographic such as lifestyle, urbanization, job, education, number of household members, gender, and age (Goldscheider, 1987;Bopape et al., 2007;Pangaribowo et al., 2011;Widarjono, 2012;Mottaleb et al., 2018;Onyeneke et al., 2020) affect the pattern of food consumption, but the effect differs between regions and households. So far, research related to food patterns in Papua Province is still using qualitative methods, a small sample, and the development of local food in terms of availability (Wasaraka, 2011;Akzar et al., 2020). ...
... However, the weakness of this model is that it assumes a linear relationship between income and total expenditure. Therefore, it is valuable to use the QUAIDS model (Quadratic Almost Ideal Demand System) since researchers (Banks et al., 1997;Bopape et al., 2007;Poi, 2012;Widarjono, 2012;Mottaleb et al., 2018) has found there is a non-linear relationship between income and expenses. In addition, the Iterated Linear Least Square (ILLS) was utilized because the estimator's Ordinary Least Square (OLS) and Seemingly Unrelated Regressions (SUR) have not overcome the endogeneity problem between budget share and total expenditure (Lecocq et al., 2015). ...
This study aims to determine the effect of tastes on local food consumption in an econometric analysis of the food demand structure in Papua Province. This study used the 2019 National Social and Economic Survey (SUSENAS) with 13.151 households conducted by Statistics Indonesia (BPS). The method used is Quadratic Almost Ideal Demand System (QUAIDS) with Iterated Linear Least Square (ILLS) estimator. The results show that education, household size, location, age, the job of the head of the household, and income group affect local food consumption. When urbanization, education, and income increase, they tend to reduce local food consumption and shift food choices from local food because it is difficult to obtain. The influence of taste from the socio-demographic side has different taste factors between urban and rural. Therefore, the government needs to increase understanding through education about food diversity and good nutrition because local food has a higher nutritional content than rice or other foods. In addition, it is necessary to increase the horizontal diversification of local food, provision a market for local-food distribution, and increase income because the economic condition in Papua is still low, so they are vulnerable to food security.
... However, the selection of potential determinants of demand system should be based upon consideration of the variables that have a reasonable use in Ethiopia and elsewhere. Hence, literatures such as [1,[6][7][8]20] were consulted and as a result, demographic variables such as household size, sex, age and education were found relevant for the study. ...
... Demand system specification such as (12) contains potential problem called expenditure endogeneity in the budget share equations that is likely to induce biased and inconsistent parameter estimates if not contained. Expenditure endogeneity arises because expenditure may be correlated with unobserved variables in budget share equations or it is jointly determined with the budget shares [19][20]. To deal with the endogeneity problem, this study applies two step augmented regression technique known as control function approach. ...
... For instance, adding sugar to garri (garri is the powdery food material flour made from the tuberous roots of the cassava) solution is very common nowadays. Unlike Bopape and Myers (2007) that considered nondiscretionary food items (grains, meat/fish, fruit/vegetable, dairy products, oil/butter/fat and sugar), 69% of the coefficients of household characteristics considered were significantly different from zero. ...
... This means that for every increase in the price of the commodity, expenditure share reduces. The result shows an improvement over(Bopape & Myers, 2007) that only 32% of the prices of the food items were significant. However, the food commodities used in this study is different from what Bopape and Myers considered. ...
Article HistoryTea is an important food drink globally with significant health benefit. However, it consumption is low in Nigeria and sub-Saharan Africa generally. There is dearth of literature on branded tea demand. Hence, household demand for branded tea in southwest, Nigeria was investigated. The study revealed the dominance of Lipton tea among other brands of tea. Demand for herbal tea was higher among older respondents. The study affirmed that the monthly household expenditure share on branded tea in the study area and across the states was low. The monthly household expenditure on complements (sugar, milk and honey) was higher than that of branded teas. The study revealed the influence of price on the expenditure shares of branded teas, its substitutes and complements. Marital status and years of education of respondent influenced the decision to consume branded tea. Expectedly, branded teas exhibited complementary relationships with milk, sugar and honey. The expenditure elasticities of all the branded teas except top tea were positive (normal goods). Improvement in local production and processing of tea locally will bring about its improved consumption. It is recommended that the relevant NGOs should raise the level of awareness on the health benefit of tea which may help to raise the household expenditure on it from the present level. Also, it is imperative for government to put enabling policy in place for tea firms to source tea leaf locally to reduce the price of branded teas as well as create jobs along the tea value chain.
... Source: Own calculation based on data from Susenas, 2017 The difference in the share of expenditure between urban and rural areas was based on income, i.e., the income in urban areas tend to be relatively higher than rural areas. Previous studies also supported the research of Bopape (2007) and Mittal (2010) which stated of a substantial difference in rural and urban household's consumption patterns; urban households had higher expenditure budgets than rural households. ...
... For meat demand, the income elasticity will become smaller as income increases. This finding in line with the research conducted by Bopape (2007) and Meanwhile, the high-income households' groups have a 0.889 high-income elasticity for poultry, which means that changes in demand will be lower than changes in income. The HoH with less than or equal to 9 years of schooling is more responsive than HoH with more than nine years of schooling. ...
... Source: Own calculation based on data from Susenas, 2017 The difference in the share of expenditure between urban and rural areas was based on income, i.e., the income in urban areas tend to be relatively higher than rural areas. Previous studies also supported the research of Bopape (2007) and Mittal (2010) which stated of a substantial difference in rural and urban household's consumption patterns; urban households had higher expenditure budgets than rural households. ...
... For meat demand, the income elasticity will become smaller as income increases. This finding in line with the research conducted by Bopape (2007) and Meanwhile, the high-income households' groups have a 0.889 high-income elasticity for poultry, which means that changes in demand will be lower than changes in income. The HoH with less than or equal to 9 years of schooling is more responsive than HoH with more than nine years of schooling. ...
This paper aims to determine the effect of demographic and socioeconomic factors and household responses to household changes in prices and income against the demand for household animal-sourced food in West Java Province. The study used cross-section data sourced from the National SocioEconomic Survey (SUSENAS) of West Java Province in 2017 analyzed through the Quadratic Almost Ideal Demand System (QUAIDS). The results showed that the demand for household animal-sourced food in West Java was influenced by price, income, and social demographic factors. All groups of animal-sourced food were categorized as normal goods, as characterized by an income elasticity value of more than zero. The income elasticity established meat commodities as the highest with eggs being the lowest. The nature of the commodity determined that all animal-sourced food groups except eggs are luxury goods. Luxury goods are categorized as such due to their above one value of the demand response against changes in income-which in this paper refers to the commodities of fish, meat, poultry, and milk. The own-price elasticity also showed meat as the most responsive commodity to price increases compared to fish, poultry milk, and eggs. The five groups of commodities achieved a negative elasticity value, as reflected by the reduced share when the decreasing demand responds to the commodity price increase. The cross-price elasticity of most animal-sourced food commodity groups achieved negative elasticity values, which indicated that the related animal-sourced food commodity groups were complementary, whereas positive elasticity values indicate the related food commodities group as a substitute.
... Variable demography is also very significant for the demand for animal foods in Indonesia (L. Bopape & Myers, 2007), (Bellemare, Barrett, & Just, 2013), (Agbola, 2003). ...
... A negative sign on the price elasticity itself means that the demand for the five foodstuffs of animal protein sources derived from eggs, chicken meat, meat (beef), fresh fish, and milk applies to the demand law. This means that an increase in the price of eggs, chicken meat, meat, fresh fish, and milk will cause a decrease in the amount of demand for each of these commodities (Bett et al., 2012), (Burggraf, Kuhn, ZHAO, Teuber, & Glauben, 2015), (L. E. Bopape, 2006) and (Abramovsky, Attanasio, & Phillips, 2012). ...
Protein deficiency is one of the causes of the poor nutritional status of the Indonesian population, is permanent, and long-term will have an impact on the lower quality of human resources. This study analyzes the impact of price and income changes on animal food consumption patterns and demand on five poverty level in Indonesia. The demand esimation uses Quadratic Almost Ideal Demand Systems, using the National Socio Economic Survey (SUSENAS) data (March 2016) compilation data of 291,414 households. The results showed that there were different interactions between beef and the other four animal protein food sources, namely the Poor, Almost Poor and Vulnerable Poor beef substitution was mainly chicken, followed by fresh fish and eggs. Hicksian's own-price elasticity decreases following the decrease in the level of household poverty. Cases of beef, household own-price elasticity "extremely poor" -11.70% and "not poor" -1.95%. The sensitivity of the decrease in beef consumption is due to an increase in own-prices for "extremely poor" households 5.5 times compared to "non-poor". Beef is a very luxurious and relatively inaccessible source of animal protein food, especially for extremely poor, poor, almost poor, and vulnerable poor households, and this constitutes 40% of Indonesia's population. To increase beef consumption, it is necessary to increase domestic beef production so that the price of beef is affordable not only for non-poor households but also for extremely poor, poor, almost poor and vulnerable poor households in Indonesia
... This means that for every increase in the price of the commodity, expenditure share reduces. The result shows an improvement over Bopape and Myers (2007) that only 32 percent of the coefficients of prices of the food items were significant. However, the food commodities used in this study are different from what Bopape and Myers considered. ...
... Also, the coefficient of sex influenced expenditure shares of yam (positively) and rice (negatively). Unlike Nigeria, the significance of 69 percent of the household characteristics in Bopape and Myers (2007) that were considered non-discretionary food items (grains, meat/fish, fruit/vegetable, dairy products, oil/butter/fat and sugar) may be attributed to normalcy in economic situation in South Africa unlike Nigeria that was in economic recession. Three out of the ten coefficients of total expenditure significantly influenced the expenditure share of the food commodities. ...
Purpose
The economic recession that Nigeria recently passed through caused distortions in economic and well-being of Nigerians. The purpose of this paper is to examine the effects of the economic recession on households’ demand for basic foodstuffs in Southwest Nigeria.
Design/methodology/approach
Data were collected from 380 respondents drawn from urban areas of Lagos, Osun and Oyo states using multistage sampling technique. Descriptive statistics and Quadratic Almost Ideal Demand System were employed to analyze data collected.
Findings
The study showed sharp increase in the prices of basic foodstuffs during recession. Households were compelled to spend higher percentage of their monthly income on basic foodstuffs. Also, 51.1 percent of the respondents were government workers who experienced inconsistent or modulated monthly salary during the period. The percentage of households that were food insecure was 36.4 percent. Osun State had the highest monthly per capita expenditure (₦5,147.13) on foodstuffs, followed by Lagos and Oyo states while rice had the highest expenditure share (0.26), followed by yam (0.18), beans (0.106), vegetable oil (0.104) and garri (0.101). The breakdown also showed that 11.7, 18.1 and 17.7 percent of the total household monthly expenditures in Lagos, Osun and Oyo states, respectively, were spent on basic foodstuffs.
Research limitations/implications
There purchasing power of naira reduced significantly during recession, thus compelled households to spend more on basic foodstuffs compared to similar purchases before economic recession.
Practical implications
The reduction in purchasing power of naira affected the formal and informal sector. Irregular salary for civil servants reduced their expenditure on goods and services.
Originality/value
The study is original and topical, serving as literature of accounts that transpired among the households as far as demand for basic foodstuffs is concerned during the economic recession.
... Unlike previous research, the studies conducted by Agbola (2002) and Bopape & Myers (2007) were based on microeconomic data. Agbola (2002) determined a complete demand system for households in South Africa based on microeconomic data. ...
... In a related study, using panel data on household food consumption in South Africa, Bopape & Myers (2007) explicitly tested the specification of the demand model and confirmed the relevance of the quadratic specification. Their model took into account structural changes and seasonal effects. ...
This study analyzes the demand for staple foods in Côte d’Ivoire and assesses the impact of fluctuations in food prices on household well-being. It focuses on the price- and income elasticities of food demand, as they are useful parameters for measuring households’ reaction to the changes in prices and incomes, and for improving food policies. The study also assesses the loss in well-being arising from food crises with a view to recommending more effective measures for supporting households. It uses an approach that estimates a Quadratic Almost Ideal Demand System (QUAIDS) in order to highlight price and expenditure elasticities. The data used in the study were obtained from the National Household Living Standards Survey (ENV) conducted by the National Institute of Statistics (INS) in 2008. The estimated expenditure- and price elasticities show that the four food clusters under analysis (cereals, root crops and tubers, fruit and vegetables, and animal products) were staple foods that were price inelastic for all the households. A substitutability relationship is observed between cereals, and root crops and tubers. However, animal products and vegetables are found to be complementary to each other and complementary to cereals and root crops and tubers.
... Or the demand for animal food is affected by the price of animal food, household income, household income squared, the number of household members, and the residential status of the household. The outcomes of this parameter estimation investigation concur with those of Bopape and Myers (2007). Table 1 summarizes the findings of the data analysis on parameter estimates. ...
Animal foods are a major source of protein for households. Gorontalo Province has a lot of potential for marine fishery development, despite being one of the provinces where families consume less protein than the national protein sufficiency rate. This article investigates the household elasticity of demand for animal food in the context of increasing prices and incomes. The Quadratic Almost Ideal Demand System is used in to estimate the share equations from which reliable price and income elasticities can be derived. The article utilizes secondary data from the National Socio-Economic Survey for March 2021, which includes consumption and household expenditure information on all animal protein-containing meals, 4,811 households make up the study's sample. All animal foods, except for eggs, were found to be highly price elastic. The most elastic food is beef, which has a demand elasticity of 3.829%, followed by chicken meat (3.13%), fish (2.345%), milk (1.311%), and eggs (0.846 percent). Eggs were discovered to be price inelastic. Except for eggs, all animal products are considered luxury goods as indicated by income elasticity estimates. Beef has the highest income elasticity (3.181%), followed by chicken (2.957%), fish (1.674%), and milk (1.574 percent). Eggs are normal items because their income elasticity is the lowest at 0.589 percent. This finding confirms that for households in rural Gorontalo, price policy is more effective than income policy.
... On the other hand, chicken meat, beef, fresh fish, and milk powder are categorized luxurious goods, referring to the sign of negative income coefficient. In addition, demography variable is found very significant for animal protein demand [3,[37][38][39]. ...
Demonstration on restrictions and accuracy of an estimator is pivotal since the incomplete restrictions will make the estimator inaccurate that they cannot be used for the need of decision making. In this study, the demand system’s three primary requirements-adding up, homogeneity, and symmetry ‒ are examined. This current research was intended to demonstrate restrictions and accuracy of Quadratic Almost Ideal Demand System (QUAIDS) model estimator. The source of the data was referred to the results of National Socio-Economic Survey of Indonesia in 2016, involving 291,414 households in total. Iterated Nonlinear Seemingly Unrelated Regression method was used for the estimation procedure. Parameter estimation is used to calculate the elasticity of animal protein. The results have indicated that the three restrictions of the QUAIDS model estimator, i. e. adding up, homogeneity, and symmetry, have been completed. Further, the estimation made by the QUAIDS model is valid and efficient; therefore, the estimation is potentially used as a means of calculating own and cross price elasticity, either Marshallian or Hicksian. In addition, some other parameters, such as price, income, and income squared, are also employed to calculate income elasticity. The findings show that demand is elastic for all animal proteins, except for eggs, which are inelastic. Beef is most elastic. According to the income elasticity results, all animal proteins are considered luxury foods in Indonesia, except for eggs, which have an income elasticity of less than one. To fulfill Indonesian households’ needs for animal protein, the income policy is more suited for beef, while the price strategy is more effective for animal proteins including chicken, milk, fresh fish, and eggs
... The second is endogeneity, which warrants attention here because expenditure may be correlated with unobserved variables in budget share equations or jointly determined with the budget shares [13,18] and results in biased and inconsistent parameter estimates [19,20] . To deal with endogeneity issue, censored demand system is augmented by residuals from reduced form expenditure model as below: ...
Food price inflation affects household welfare and the macroeconomy pervasively. The study estimated Quadratic Almost Ideal Demand system of six food groups to simulate the money costs of food prices inflation on households’ welfare and; predict relative potency of income and price policies to counter the effects in a particular context of South West Ethiopia. It drew on Household Income and Consumption Expenditure Survey data of 519 households collected by the Central Statistical Authority of Ethiopia. Rural households respond more to income and prices than do urban dwellers. The welfare losses from food price inflation fall heavily, more on urban households than their rural counterparts. On average, it requires resource allocations as large as percentage increases in prices to keep households’ welfare at pre-price change levels. It is suggested that a sector-specific mix of income and price policies could offset the negative consequences on consumers’ welfare.
... This finding supports Donkoh and Amikuzuno (2011) who underlined that locality is among the factors that significantly underlie the household expenditures on education. It is also in line with Hussain and Asad's (2012) finding that urban households expend more on electricity than rural ones and that of Bopape and Myers (2007) who reported that food consumption decisions differ remarkably between rural and urban households. This reflects that the urbanization process of rural areas and the provision of basic infrastructure are very important to improve the welfare conditions of households. ...
Economists use two different approaches, unitary and collective, to analyze household decisions. The unitary approach ignores the differences between single-person and multi-person households, whereas the collective approach states that each person in the household must be characterized by specific preferences. The household’s decisions concern mainly the allocation of their income to current consumption or for savings and future consumer expenditures. This study uses the Comprehensive Food Security and Vulnerability Analysis (CFSVA) data collected from a random sample in 2015 in Rwanda. The ordinary least squares (OLS) method was applied to a linear regression model to estimate the household demand functions (total household consumption expenditures, household food consumption expenditures and household nonfood consumption expenditures). The results show that the socioeconomic characteristics of the household, the possession of productive assets and wealth conditions as well as the household locational controls are among the primary drivers of its consumption expenditures. The findings highlight the policy efforts that improve household human capital (education, health), access to and capitalization of productive assets and financial capital, continuous urbanization of rural areas, and sustained provision of quality infrastructure, to achieve high standards of household welfare.
... It indicates that there is a nonlinear relationship between total expenditure and animal foods demand. This result aligns with the previous study such as in Indonesia (Bopape and Myers, 2007;Pangaribowo and Tsegai, 2011), and in Ethiopia (Tefera et al., 2018). The quadratic parameters of expenditure on chicken and fish are negative. ...
This research aims to analyze the impact of the price change, the income, and the household size on the demand for five commodity groups, i.e. eggs, chicken, beef, fish and powder milk. The data utilized in this study is based on the Indonesian National Socio-Economic Survey 2016. There are 291,414 data of households in Indonesia which was analyzed by Quadratic Almost Ideal Demand System. The result shows that all of the price elasticity was negative and the income elasticity was positive. The effect of income causes the demand for animal foods in Indonesia to be more elastic rather than other commodities with the highest demand of elasticity, i.e. beef, powder milk, fish, meat and eggs by 2.19%, 1.96%, 1.53%, 1.43%, and 0.53% respectively. The beef has the most sensitive effect to changes the income. Therefore, the government requires maintaining the stability of beef prices to increase beef consumption in Indonesia.
... This mean household size is Beef, Fish and Eggs in Dekina Local Government Area of Kogi State, Nigeria consistent with the national average household size reported by [26]. Similar range was reported by [22] for food consumers in South Africa. ...
Overtime malnutrition has become the world's most apocalyptic problem and is inextricably connected to protein deficiency. Against this backdrop, this study focused on econometric analysis of demand for beef, fish and eggs in Dekina Local Government Area of Kogi State, Nigeria. A total of 120 respondents sampled in a cross sectional survey with the aid of a questionnaire was used for the study. Descriptive and inferential statistics were used for data analysis. Results indicated a mean age of 43 years, household size of 7 members, 11 years of formal education and a mean monthly income of N 53, 575 for the respondents. The OLS estimates revealed that while price and income were the major factors affecting demand, price relate negatively to quantity of Beef, Fish, and Eggs demanded portraying the law of demand, income and education relates positively. Family size, farming occupation, nonfood expenditure and distance to market correlate negatively. An R 2 of 0.998, 1.000, and 0.999 shows that 99.8%, 100.0%, 99.9% of variation in the quantity of Beef, Fish and Eggs demanded were explained by the exogenous variables. The results of own price, cross price and income elasticity revealed that while beef and fish were price elastic, eggs was price inelastic but there are close substitutes and are normal goods. Additionally, price flexibility of demand for beef, fish and eggs indicated that they are normal goods and are price flexible. In order to slenderize protein deficiency, policies geared towards increment in salaries and wages of workers to stimulate demand, reduction in income inequality gap, a boost in livestock production and an efficient price policy for the commodities is advocated.
... There is a growing body of literature providing evidence on the consumer demand worldwide. Due to the expectations of greater price and income sensitivity and responsiveness, primary interest of the food demand analysis was focused on developing countries [1,6,29,30,33,44] and transition economies [3,13,19,21,22,39,42]. Only a limited number of studies of the food demand system shed the light on the household food demand in the case of transitional economies from the Central and Eastern Europe (CEE). ...
Transition economies switching from the planned to market economy experience quite rapid structural changes in food consumption pattern. From scientific and policy intervention perspective, Kosovo provides interesting case study in analysing food demand system. Main objective of this study is to provide fundamental food demand analysis in the case of Kosovo. For such purpose, we estimate complete food demand system in which demand depends on income, prices and other socio-economic household characteristics. Along with assessment of the non-parametric Engel curves, study estimates complete demand system by using Quadratic Almost Ideal Demand System (QUAIDS). For the purpose of this study, we use micro data of the Household Budget Survey (HBS) obtained from the Kosovo Agency of Statistics (KAS). Dataset samples cover the period of eight rounds, including period between 2005 and 2012. The HBS dataset provides detailed information on monthly income and expenditure. QUAIDS estimations were conducted based on the STATA code developed by Poi (2012). Estimations were performed on the cross-sections with time trend aiming to maximise efficiency of estimates. QUAIDS parameters were estimated on the annual basis in order to track the dynamics of demand elasticities over the time period observed. Results of this study are coherent with findings from earlier studies in other transition economies. Estimates of expenditure elasticities reveal positive coefficients for all commodity bundles (excluding cereals). A greater magnitude of elasticity is evident in the case of fruits and vegetables (1.35) and meat and fish (1.01). Negative expenditure elasticity for cereals suggest that, ceteris paribus, as incomes rises Kosovo households perceive cereals as inferior goods with greater extend of substitutability. On the other hand, all own-price elasticities coefficients are negative suggesting that results are consistent with the demand theory. Meat and fish and dairy products display the value of own-price elasticity less then unit elastic. Coefficients for this food bundles reveal that as the price changes the quantity demanded is less sensitive. On the other hand, results suggest that cereals exhibit significantly greater own-price elasticity than unitary value (-2.25 and -2.18). Such high price sensitivity for cereals is not surprising for two particular reasons. Firstly, for the “bread eating” countries, such as Kosovo, cereal prices were increasing rapidly, therefore probability of substitution, as the price rises, is significantly greater. And secondly, Kosovo households are undergoing “nutrition transition” signalling transitioning food pattern towards the higher-value diet. Policy responsiveness in the case of our
findings should be directed towards income improvement measures aiming to generate employment opportunities, particularly under the current conditions of high unemployment constraints in Kosovo. Contribution of agriculture at this stage might be an important income-generating sector.
... Consequently, measures should be put in place to ensure sufficient quantities of food (primarily including animal protein) to cater for the growing population. The consumption of animal protein is vital as it contains important amino acids that are not found in plant protein (Bopape and Myers, 2007). The consumption of meat protein was found to be far below the daily requirement of 200 g, as suggested by (Brennan and Leonard, 2005;FAO and WFP, 2016). ...
Quail production refers to the rearing of birds, meticulouslychosen with the use of comparatively exhaustive systems,for meat, eggs or other purposes. The study was carriedout in Bindura urban area to evaluate the viability of urban quailfarming. A total of 40 urban quail farmers selected throughsnowball sampling, and 10 key randomly selected informantswere interviewed. Semi-structured interview guides were used,addressing such topics as history, ownership, management,opportunities, challenges and business records of urban quailfarming in Bindura town, Zimbabwe. A descriptive analysisof data was performed. As shown by the results, the rearing ofquails is a new agricultural business in the history of Zimbabwe.The main challenges highlighted by urban quail farmersincluded inadequate housing facilities, insufficient space, theft,predation, inadequate knowledge, fluctuations in market prices,inability to access credit and misconceptions in urban agriculturepolicies. Despite the challenges cited above, urban quailfarmers manage to provide eggs and meat to their families andrelatives. Urban quail farming proved to have the potential toboost family income and reduce poverty to some extent. Also,it provides an opportunity for academic research on the allegedmedicinal properties of quails. The study concluded that urbanquail farming plays an important, yet unexplored, role for thelivelihoods of the urban population. The study recommendspolicy changes that address the following issues: new developmentsin urban agricultural planning; awareness and educationcampaigns for various stakeholders; monitoring and coordinatingurban agricultural activities; and provision of loans andother credit facilities. The study also proposes the governmentto support quail farmers through the establishment of processingfacilities for quail products.
... There is a growing body of literature providing evidence on the consumer demand worldwide. Due to the expectations of greater price and income sensitivity and responsiveness, primary interest of the food demand analysis was focused on developing countries (Abdulai and Aubert, 2004;Molina and Gil, 2005;Bopape and Myers, 2007;Mittal, 2010;Pangaribowo and Tsega, 2011;Zhou et al., 2014) and transition economies (Goodwin and Phaneuf, 2001;Hossain and Jensen, 2000;Brosig, 2000;Szigeti and Podruzsik, 2011;Erjavec et al., 1998;Regoršek and Erjavec, 2007;Hossain and Jensen, 2000;Aleksandri et al., 2014;Cupak et al., 2015). ...
Study performs food demand analysis in the case of Kosovo. Paper models food consumption behaviour using the HBS data for the period 2005-2012. Along with assessment of the non-parametric Engel curves, here we estimate complete demand system by using Quadratic Almost Ideal Demand System (QUAIDS). Elasticity estimates for five food bundles were amplified with demographic and expenditure controlling variables. Main results reveal that cereals and dairy products are perceived as inferior goods, while the meat, fruits and vegetables are regarded as normal goods. Consistency with the demand theory is affirmed when estimating price and expenditure elasticities. Exception is noticed in the case of cereals, depicting significantly higher own-price elasticity as well as negative expenditure elasticity. Such price sensitivity signals that Kosovo is undergoing transition of the food pattern from the traditional cereal-based diet towards the consumption of the high-value food such as meat and fish. Rising disposable income is found to play prominent role in fostering nutrition transition of the food pattern in Kosovo.
... To illustrate the social demographic impacts, we use the demographic translation approach by Pollak and Wales (1978) to add the social demographic variables, a vector of D k (k ¼ 1, …, L) in Equation (3) (Abdulai and Aubert, 2004;Bopape and Myers, 2007). Then, the specific form is revealed as the following: ...
Purpose
In the process of economic development and urbanization, it is important to capture the outgoing rural migrant workers’ food consumption characteristics for ensuring China’s future food security. The purpose of this paper is to empirically analyze the structural characteristics in food consumption demand of outgoing rural migrant workers.
Design/methodology/approach
The food consumption of rural migrant workers is estimated using a quaids approach by the GMM estimator to reveal the determinants of the food consumption of outgoing rural migrant workers in urban China based on a sample of 876 of outgoing rural migrant workers from the 2007-2009 household survey conducted by the National Bureau of Statistics of China.
Findings
The results show that the GMM estimator is consistent compared with the SUR estimator; the conditional expenditure elasticities of grain foods, livestock products, edible oils and vegetables by outgoing rural migrant workers are0.877, 1.081, 0.787 and 0.958, respectively; the unconditional expenditure elasticities of grain foods, livestock products, edible oils and vegetables are 0.634, 0.782, 0.569 and 0.693, respectively; the conditional Marshallian own-price elasticities of grain foods, livestock products, edible oils, and vegetables are -1.004, -1.019, -0.645 and -1.021, respectively.
Practical implications
First, the differences in food consuming patterns between rural residents and outgoing rural migrant workers should be emphasized in ensuring China’s food security for the policymakers. Second, how to ensure the supply for the increase in the consumption demand of livestock products in urban areas should be a major focus of China’s food security strategy.
Originality/value
876 households of outgoing rural migrant worker from the 2007-2009 household survey conducted by the National Bureau of Statistics of China are used; compared the GMM estimator with the SUR estimator in the estimate of the QUAIDS model; it sheds light on the structural characteristics in food consumption demand of outgoing rural migrant workers.
... Methods to obtain estimates of own-price flexibility for South African hake in the domestic market included looking at values of its inverse measure, the own-price elasticity reported in Agbola et al. (2002), Gordon et al. (2013) and Bopape and Myers (2007). We consider SA hake products to be a "quasi luxury" goods in the domestic market. ...
Eco-labelling has become an essential component of the global sustainable seafood trade. The Marine Stewardship Council (MSC) is the world leader in certification and eco-labelling programmes for wild capture fisheries. While the environmental benefits of certification have been widely recognised, its economic benefits for specific fisheries are often anecdotal or unknown. The South African hake trawl fishery was first certified in 2004, re-certified in 2010 and most recently in 2015 for a further five years. This study was conducted to estimate the potential economic benefits of MSC certification to the Hake fishery. As a basis for this, an analysis of the global production and trade in whitefish, focussing on hake was conducted using the Food and Agricultural Organisation of the United Nations’ FishStat and the United Nations’ UN Comtrade data. Additional information was collected from industry sources, non-governmental organisations (NGOs) and from MSC-specific data on export volumes and values. A succession of four scenarios was proposed to simulate possible economic outcomes resulting from shifting to a non-certified fishery. The method then compared the current economic worth of the fishery to the progressive loss of value following these scenarios; the difference representing the net worth of MSC-certification to the fishery. The analysis showed that the fishery‘s Net Present Value (NPV) of combining these scenarios over a 5-year period corresponds to a 37.6% reduction vis-à-vis the status quo. This study showed that retaining MSC-certification is critical for the fishery to maintain its market position.
... Empirically, (1) has been implemented by numerous researchers in even more numerous settings. In the case of South Africa, for example, research using this specification has primarily focused on food demand, as in the analysis of Agbola, Maitra & McLaren (2003), Taljaard, Alemu & van Schalkwyk (2003), Bopape & Myers (2007) and Dunne & Edkins (2008). However, Koch (2007) examines alcohol and tobacco expenditure, Koch & Bosch (2009) examine the welfare effects of inflation, and Koch & Alaba (2010) examine the potential effects of national health insurance on expenditure patterns. ...
Engel curves are often estimated within a linear, or at least approximately linear, system of equations. However, Engel curves are required to lie on or within the unit interval, while summing to unity. These restrictions are not easily accommodated within a linear system. Therefore, we apply the fractional multinomial logit model in our estimation of expenditure shares, because it more readily accommodates these theoretical restrictions. Within our estimation subsample from the South African Income and Expenditure Survey, we find that accounting for these restrictions within the fractional multinomial logit model provides a better fit to the data than does the standard linear system.
... Literatures (e.g. Agbola, 2003;Bopape et al., 2007) suggest that it is easier to interpret price and income effects in terms of elasticities. Estimates of expenditure elasticities are presented in Table 5. ...
This study described the food demand of rural households of Nigeria with a view to identifying its determinants
and responsiveness to price and household food expenditure.The study made use of 121 rural households in Ondo
state using a 3-stage random sampling technique.Demand for food groups in this study was estimated using
Quadratic Almost Ideal Demand System (QUAIDS). The Wald test revealed that the QUAIDS model was
significantly corrected for endogeneity and that the inclusion of demographics in the model significantly improved
estimates. Food group grains and starch basket had the largest share (49%) of household total food expenditure.
Grains and starch was expenditure inelastic, animal protein was a luxury, Fruits and Vegetables group was
inelastic, while Fats and Oils were elastic. Own price elasticities were all negative as expected in both
uncompensated and compensated price elasticity estimates. The Hicksian cross-price elasticities showed that all
food groups were net substitutes. Arising from the foregoing, the study concludes that animal protein group and fat
and oil group are income responsive while others are inelastic. The study further revealed that all food groups are
normal food and price inelastic with the exception of fats and oil (price elastic). Price, household size, total food
expenditure, and expenditure on food away-from-home were key determinants of food demand among rural
households in Ondo state.Therefore policy directed at increasing both farm income and non-farm income to
increase expenditure and promote food security should be given more attention.
... The average shares of mutton & goat meat and eggs for the poorest quintile are 7.4 percent and 2 percent, respectively, which are considerably less than the 10.3 percent and 4 percent, respectively, for the richest quintile. Bopape and Myers (2007) have reported consistent results for South Africa. They found that high-income groups have higher expenditure shares for meat, fish, and dairy products, whereas lowincome groups have a higher expenditure share for grains. ...
... To address possibility of non-linearity in expenditure functions, we complement our estimation with a quadratic specification of the AIDS model that is frequently used in applied work (see for example, Banks et al, 1997 for the derivation of quadratic AIDS model; and Bopape and Myers, 2007, Tasciotti, 2007 for recent applications). The quadratic AIDS demand system is given by: ...
This paper analyzes welfare implications of rising commodity prices in Ethiopia based on household budget surveys. Our findings suggest that a rise in relative prices of such necessities as cereals would lead to a large deterioration in the welfare of households in urban areas. In rural areas generally land-rich households tend to benefit significantly from the recent surge in food prices, while the land-poor and typical farm households tend to experience negative growth. Thus, price shifts in favour of agriculture could aggravate poverty conditions in rural areas. Simulated Gini computed from simple demand systems indicate worsening income distribution in urban areas due to price shifts that would exacerbate the already dire poverty conditions. The paper also reported own and cross-price elasticities mainly for cereals to gain insight into magnitude of demand shifts due to income and price changes.
... d Muellbauer (1980a) are among the two models developed for estimating flexible demand systems. The models necessitate approximating direct and indirect utility functions or the cost function with some specific functional form that has enough parameters to be regarded as a reasonable approximation to whatever the true unknown function might be (c.f Bopape, 2006). They are members of the Price Independent Generalized Logarithmic (PIGLOG) class of demand models (Muellbauer, 1976), which have budget shares that are linear functions of log total expenditure. The AIDS model has been the most commonly used specification in applied demand analysis for more than two decades as it satisfies a number of ...
Ethiopia has experienced high food prices since early 2004. This paper examines the welfare impacts of rising food prices in rural Ethiopia using Quadratic Almost Ideal Demand System (QUAIDS) approach controlled for expenditure endogeniety and zero consumption expenditure. The elasticity coefficients from QUAIDS are used to estimate Compensated Variations (CV), which explicitly accounts for profit function and substitution effects. The study uses Ethiopia Rural Household Survey (ERHS) panel data in four waves encompassing both low and high price periods. The results have shown high food prices in recent years (between 2004 and 2009) increased welfare gain of rural households by about 10.5 percent on aggregate, as compared to less than 1 percent for the reference period (between 1994 and 2004). The welfare gains further improved to 18 percent (high price periods) with substitution effects, compared to 7.2 percent (low price periods). The welfare gains at aggregate level may not be equally distributed among rural households as about 37-46 percent of the sample households were net-cereal buyers (major staple crops) over the survey periods. However, the analysis has revealed high food price benefits not only net-cereal sellers but also autarkic and net-cereal buyers. The autarkic and net-cereal buyers could diversify income sources and benefits from high prices of other commodities such as such as pluses, fruits & vegetables, animal and animal products. They could also diversify to off-farm activities as average income from wage and transfer has indeed increased in 2009. Only poor families with limited farm and non-farm income need to be supported with safety net programs (both input and consumption support). It should be noted that, in the long-run, high prices could encourage net-sellers to invest and increase production which will eventually lead to lower food prices, which in turn benefit net-buyers. Meanwhile, many current net buyers could become net-sellers if grain prices are stable and favourable and if productive inputs are made available and affordable.
... Empirically, (3) and (4) have been implemented by numerous researchers in even more numerous settings. In the case of South Africa, for example, research using either of these specifications has primarily focused on food demand, as in the analysis of Agbola, Maitra & McLaren (2003), Taljaard, Alemu & van Schalkwyk (2003), Bopape & Myers (2007) and Dunne & Edkins (2008). However, these models have also been used by Koch (2007) to examine alcohol and tobacco expenditure, by Koch & Bosch (2009) to examine the welfare effects of inflation, and by Koch & Alaba (2010) to examine the potential effects of national health insurance on expenditure patterns. ...
The research presented here considers the performance of the Fractional Multinomial Logit (FMNL) model in explaining expenditure shares using data from the 2005/06 South African Income and Expenditure Survey. The results suggest that the FMNL performs favourably, when the dataset is large enough, but that it does not perform as well, when the dataset is limited. Expenditure elasticities were also estimated, and compared to the expenditure shares from a QUAIDS model. The resulting expenditure shares are fairly similar across model specification; however, the FMNL model does incorporate additional curvature, which is easily observed when comparing the QUAIDS elasticities to the FMNL elasticities.
The pattern of food consumption determines the level of household welfare, but for households with low income, the share of food expenditure is dominated by carbohydrate food. Protein foods are the second food consumed after carbohydrate staple foods. This study analyzes food consumption patterns away from home as a source of protein for households in Indonesia. The research data uses secondary data in the form of Susenas data in 2020 which covers of thirty-four provinces and the samples cover 334,127 households in total. The research data is in the form of total household expenditure data, data on the number of household members, consumption and expenditure data of FAFH as a source of household protein in Indonesia covering eight types of food, namely 1) soup namely soto, gule, sop, rawon 2) satay, tongseng 3) meatball noodles, chicken noodles 4) cooked fish 5) cooked chicken or meat 6) processed meat 7) chicken porridge, and 8) dumplings, batagor. The consumption preference model approach uses the Probit Model. The results showed that all FAFH foods had a high significant effect on FAFH consumption patterns. However, the household size variable shows a negative relationship. The higher the household size, the lower the possibility of consuming FAFH. The findings of this study demonstrate that, despite the COVID-19 pandemic, the intake of FAFH protein is increasing, albeit at a very slow rate. This also demonstrates that FAFH food is a source of protein for households in Indonesia.
Consumption of protein was often used as an indicator of household welfare. This study analyzed the impact of price andincome changeon demand foranimal food in rural households in Central Java, using the Quadratic Almost Ideal Demand System model approach. The research data used data from the National Socio-Economic Survey, totalling13, 872 households. The output appeared that a one percent increase in animal food prices reduced the demand for eggs, chicken, beef, fish, and milk by 0.505%, 1.281%, 4.099%, 3.424%, and 1.915%, respectively. The most elastic animal food group is beef, followed by milk, fish, chicken, and eggs with income elasticities of 3.278%, 2.339%, 2.156%, 1.411%, and 0.556%. All animal food is a luxury item except eggs, which are normal goods. Beef is a substitute for fish, chicken, and eggs, while milk is complementary. The price policy is more effective compared to the income policy for rural Central Java. Rural households in Central Java very responsive to changes in price.
Dried fruit price increases caused significant numbers of households to fall into nutritional poverty particularly in the developing world. The dried fruit prices increased disproportionately in Iran during the one-year period. While Increasing dried fruit prices resulted in decreasing some dried fruit purchases, it influenced the food security of many people.The objective of this article is to provide an assessment of decreasing nutritional well-being due to dried fruit price surging in rural and urban regions in Iran. In this study, each sample of rural and urban households divided to two various expenditure groups including high income and low income groups. Utilizing samples of 6014 rural households and 6860 urban households selected from national expenditure survey data of 2011 and 2012, censored quadratic approximations of the almost ideal demand system are estimated and nutritional well-being effects are discussed separately for each household group in these areas. The findings of this study indicate that respectively almost 62 percent and 56 percent of rural and urban households entering nutritional poverty due to recent dried fruit price surging.
This paper aims to provide a better understanding of the relationship between income and the demand for different types of food, nutrients, and calories in Africa by conducting a meta-analysis of income elasticity estimates. We build a meta-sample consisting of 1523 food-income elasticities, 369 nutrient-income elasticities, and 123 calorie-income elasticities extracted from 66 primary studies covering 48 African countries. The sample displays a large heterogeneity in income elasticity estimates, which our meta-analysis aims to explain by looking into attributes of the primary studies and characteristics of the countries considered. There are significant differences in the size of the income elasticities across food and nutrient groups. Foods that make up basic diets tend to have lower income elasticities, while elasticities are considerably higher for less basic and more aspirational foods. The role of methodological attributes of the primary studies in explaining heterogeneity is found to be small. Overall, our results confirm that although income growth in Africa will increase food consumption and lead to more nutritionally diverse diets, it is also associated with excessive intakes of fats and sugars, raising concerns about over-, in addition to undernutrition. This suggests that income-based policies can still play a role in the fight against hunger, but that targeted programs are needed to promote nutritionally valuable and healthy diets.
This paper investigates the expenditure patterns of South African households using detailed cross-sectional expenditure and price data that varies across region and time. Linear expenditure system parameter estimates are used to calculate income and price elasticities for a number of product categories at different points of the income distribution. We find substantial variation in the price and income elasticities of demand for items across the income distribution, with the bottom quartile being extremely sensitive to increases in the price of food and clothing items, and the top quartile being as sensitive as households in developed countries.
In this study, we estimate final demand for beverages with a particular focus on alcoholic beverages and calculate elasticities using microdata from the Swiss household expenditure survey from 2000 to 2009, which containsdata from more than 34,000 households. We estimate price and income responses for three household segments — light, moderate, and heavy drinking households — to assess whether higher alcohol consumption could be described by different price and income elasticities in comparison to lower alcohol consumption. We obtain unconditional estimates by applying a two-stage budgeting quadratic almost ideal demand system. To generate missing price data, we used the recently proposed quality adjusted price approach. Due to a high share of zero consumption for some beveragescategories,we correct the model with a two-step estimation procedure. Estimation results show that heavy drinking households are much less price elastic with respect to wine and beer in comparison to moderate or light drinking households, while the price response for spirits is almost constant over the three segments. Before implementing a new tax for alcoholic beverages in Switzerland, the social, health, and economic effects of a rather small decrease in alcohol consumption among heavy drinking households must be weighed against possible negativeconsequences of a sharp decline in light or moderate drinking households.
In this study, we analyze the effects of socio-demographic and economic factors of households on the consumption of milk and milk products by considering the recent increased economic trend in Turkey. The multivariate Heckman sample selection system (MSS) is used to analyze the data. The likelihood of spending and levels of expenditure on each foodstuff are jointly analyzed by assuming all pairwise cross correlation. The data used in this study are obtained from Turkish Statistical Institute (TURKSTAT) of 2010 Household Consumption Expenditures Survey (HCES). After discarding missing observations and outliers from the sample, the data finally contain 9442 individual observations. Results indicate that households with younger household heads (20-29 years) as compared households with household heads aged 60 and over are less likely to spend and spend less on milk, yoghurt, cheese with other dairy products in both regions. Families with children 0-5 years old are more likely to spend and spend significantly more on dairy products than that of families with other kids combinations in both regions. Families with annual income 15-30 thousand, 31-45 thousand and 45 thousand and over in Turkish Liras (TL) as compared to the base group (families with annual income 15 thousand TL) spend more 4.5 TL, 9.8 TL and 16.6 TL respectively on cheese and other dairy products in urban area, while these figures are 3.6 TL, 8.0 TL and 9.3 TL for rural households, respectively.
This paper considers household expenditure patterns through the estimation of parametric share estimates. The parameters from these expenditure share estimates are then used to simulate the underlying income transfer (compensating variation) that would be required to offset price increases for various goods. The simulations are considered across the expenditure distribution to provide a series of estimates of the welfare effects of inflation on both poor and non-poor households. Given data limitations, preventing the estimation of substitution effects, non-poor households generally bear the brunt of inflation, primarily due to their larger expenditures. The only exception to the aforementioned generalisation is the impact that food inflation has on low expenditure households relative to high expenditure households. The results in this paper are consistent with the expectation that food inflation has a larger welfare cost to poor households than it does for non-poor households, and we are able to present an estimate of those welfare cost differences.
Maize is a staple food to many Zambians. It is for this reason that it has received a lot of support from government as a way of maintaining food security in the nation. No other crop in Zambia currently receives such level of support from government. Factors influencing its availability can thus seriously affect food security. In recent years, Zambia has not been spared by adverse climatic changes that have continued to affect the entire globe. In the early 1980s the southern “maize-belt” part of the country that was devastated by continuous drought that caused villagers to go hungry and lose a lot of livestock that was their main livelihood. The trend of decreasing rainfall in consecutive seasons has continued in many parts of the country. Because most smallholder farmers, who are the major contributors to the nation’s food supply, depend on rain for crop production, there has been a deliberate policy by government through the Ministry of Agriculture and Co-operatives to encourage the farmers to diversify their on- and off-farm activities to improve food security at household and national level. To this end, the government has continued to encourage the growing of cassava. Several studies have suggested that cassava is a nutritious food crop (Chitundu, Droppelman and Haggblade, 2006). Cassava has a number of industrial uses too. Good attributes of cassava lie not only in the nutrition content of the tuber and leaves but also in the fact that as a field crop it does not require expensive inputs like fertilizer and is better able to withstand drought compared to the maize crop. This study attempts to understand the economic factors that influence consumption of cassava to shed light on its potential to avert potential crisis associated with prolonged droughts. Based on the survey conducted in 2007 in Lusaka, the study found that price and quality of cassava meal are the principal determinants of cassava meal demand in Lusaka. Direct price elasticity of demand for cassava is -1.32, suggesting that cassava meal is price elastic. The study also found that the cross price elasticity between maize meal price and cassava meal demand is 0.04 suggesting that cassava meal is a substitute to maize meal, but inelastic. The income price elasticity of demand for cassava meal is -0.12. However, income was found to be statistically insignificant in determining the demand for cassava meal. As such these economic factors are keys to the consumption of cassava. Therefore, the study suggests that the demand for cassava meal in Zambia may be improved through deliberate promotion. United States Agency for International Development Initiative for Long-term Training and Capacity Building Master of Science Masters Department of Agricultural Economics Vincent R. Amanor-Boadu
The demand for livestock products is projected for the next 25 years. Data on expectations regarding the following factors were included (a) population growth, (b) urbanisation, (c) income per capita growth and (d) income elasticities. Data for each population group were included. The model shows significant increases in demand for livestock products especially under assumed high growth scenarios. Die vraag na lewendehaweprodukte word geprojekteer vir die volgende 25 jaar. Verwagte inligting met betrekking tot die volgende faktore is inaggeneem (a) bevolkingsgroei, (b) verstedeliking, (c) per kapita inkomstegroei en (d) inkomste-elastisiteite. Data vir elke bevolkingsgroep is ingesluit. Die model toon betekenisvolle groei in die vraag na lewendehaweprodukte veral onder die aanname van vinnige ekonomiese groei.
Poverty in South Africa varies greatly across the nine provinces. An accurate estimation of relative poverty shares is important because they serve as key indices for targeting social expenditure. In this article we test the robustness of provincial poverty rankings against changes in measurement methodology. In recent years, a large body of international literature has developed concerning the choice of an appropriate poverty line and the construction of more appropriate poverty measures. This article uses two of these recent developments - the concept of a poverty critical range in place of a single poverty line and distribution-sensitive decomposable poverty measures — to re-examine provincial poverty. Results are checked across two recent national data sets.
This article provides an example illustrating how to use Stata to estimate systems of household demand equations. More generally,the techniques developed here can be used to estimate any system of nonlinear equations using Stata's maximum likelihood routines. Copyright 2002 by Stata Corporation.
South Africa is emerging as a major player in the world agricultural products market. This study investigates aggregate food demand patterns in South Africa using a LA/AIDS modelling framework. Data from 1993 integrated national household survey are employed in the analysis. Empirical results show that demand for meat and fish, grains, dairy products, fruits, vegetables and other foods are generally price elastic. The expenditure elasticities imply that meat and fish and grains are luxury products, while dairy products, fruits, vegetables and other foods are necessities in the household diet. The results also indicate that, if income of households increases food expenditure on meat and fish and grains would increase while that on dairy products, fruits, vegetables and other foods would decrease. Race, age, and gender of household head, urbanisation and family size affect food demand in South Africa.
In this paper we estimate a complete system of demand equations making full use of the restrictions implied by economic theory. Our theoretical model is based on the Klein-Rubin linear expenditure system which was first estimated by Stone. We place primary emphasis on maximum likelihood estimates obtained using annual time series observations of prices and per capita consumption for the U.S. economy in the period 1948-1965. The plan of the paper is as follows: Section 1 begins with a discussion of the problems involved in making systematic use of economic theory to estimate demand functions; this is followed by a brief description of the linear expenditure system and discussion of the specification of its dynamic and stochastic structure. In Section 2 we describe three methods of estimating the linear expenditure system, including the maximum likelihood procedure which we believe is most appropriate. We report our results in Section 3 and our conclusions in Section 4.